- The Washington Times - Monday, June 5, 2000

The telephone and the fax machine are two of the most outdated pieces of technology, according to Orville Bailey and Richard Waugh, founders of one of the area's newest electronic commerce software companies.
B2E Markets of Rockville develops software that helps companies move through complex supply chain operations. The company provides clients with a customized database of supplier information, and helps the buyer and supplier negotiate bids, all without the use of fax or telephone.
Richard Waugh, co-founder and vice president of marketing for B2E markets, said buyers spend too much time worrying about contacting suppliers and negotiating contracts.
"The trick is to relieve the buyers of that burden," Mr. Waugh said. "The whole notion of the system is to eliminate and automate as many of these tasks to free them [buyers] up to think and act strategically."
The company intends to target manufacturing businesses with complex supply chain operations that can be streamlined with the software. B2E Markets wants to do business with chemical, industrial manufacturing, consumer goods and transportation companies.
"We sell to large companies a solution that helps them make better buying decisions," said Mr. Bailey, president and chief executive officer of B2E Markets.
Just as a real estate agent takes a buyer through the process of buying a house, B2E takes a business through the steps of buying equipment, Mr. Bailey said. "Big businesses go through that process for everything … [the B2E software] walks them through that process."
Mr. Bailey and Mr. Waugh in 1998 left jobs at GE Information Services to start a consulting business helping start-ups with procurement. They soon realized the need for a software solution for time strapped young companies.
"There was an unmet market need for this type of technology and we just felt we were in a great position to go after that," Mr. Waugh said.
B2E's software helps expand that marketplace by bringing smaller supply companies into the mix and creating greater competition.
"The Internet lowers the barriers to entry and empowers business buyers to not seek out large suppliers," said Mary Cicalese, senior analyst for Jupiter Communications.
Ms. Cicalese said B2E software lowers costs by providing a larger pool of suppliers. "It's a win-win for the buyer and the supplier," she added.
The company is testing its software for free on three companies, which the firm would not name. But it does not have any clients yet.
B2E opened for business in November 1999 with $13.5 million in venture capital from FBR Technology Venture Partners, Andersen Consulting, Syndicated Communications, Carthage Partners and Ascend Venture Group. The company's executive said they could reach revenues of up to $4 million this year if they can sign about 12 clients.
"I think even the most experienced professionals would benefit from automation of more of the manual task," Mr. Waugh said.
Mr. Waugh said the software is especially beneficial to new buyers who may not know how to organize the supply chain, deal with suppliers or negotiate contracts.
"The corporate learning is in their head or it's in a cabinet somewhere and there's no access to that," Mr. Waugh said.
"Companies need to buy both raw materials such as steel or other fabricated metals," Mr. Waugh said. "They also purchase other kinds of production goods, items that go into the end product, electronic components, plastic molded parts."
B2E software addresses the front end of that process, filtering through all the suppliers possible to find the ones that fit the company's needs. Once B2E signs a client, researchers at the company start compiling information on the client's relevant suppliers. The company then filters through them and finally begins negotiations.
Buyers send a supplier an e-mail with an embedded URL for the B2E Markets service. When the supplier clicks on the link, they are brought to the B2E Markets Web site where they enter a user number and password. The supplier then has the ability to receive and respond to bids.
B2E software allows the client to receive confidential quotes and allows for private secure bidding over the Internet. "We actually think of our software as the work bench for these procurement processes," Mr. Waugh said.
"We will have captured full profile information about the suppliers, so buyers on our systems have full visibility," Mr. Waugh said.
There is no cost to suppliers, either, who need only to be able to use the Internet to benefit from the deal, he added.


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